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Co-existence.\u00a0 <\/b>It\u2019s a theme which has not been explored by the \u201cE-tail v\/s Retail\u201d debate. \u00a0That\u2019s because the \u201cE-tail v\/s Retail\u201d debate started in saturated markets such as the US and the UK. In an Indian context where the consumption wave is expanding the overall market size \u2013 this debate needs to be contextualized to refocus on a \u201cBrick and Click\u201d synergy.<\/p>\n
A Google India-Nielsen \u2018Tech Shopper\u2019 study conducted in 2012 found that more than 40 per cent of the in-store purchasers in metros, Tier I and II cities undertake online research before making a decision. Consumers have begun to \u2018converge\u2019 e-tail and retail in the way they buy \u2013 it\u2019s time for retailers to do the same.<\/p>\n
STORAI spoke to four powerful brands \u2013Croma, Ferns & Petals, Titan, and Hidesign, about how they are exploiting this synergy.<\/p>\n
Croma \u2013 Capturing Brand-share<\/b><\/p>\n
\u201cWe ventured online (www.cromaretail.com<\/a>) because there were many towns where we were not physically present; but where there was a strong brand recall \u2013 because Croma is a TATA enterprise. We\u2019ve found, that our physical network of 100+ stores has strengthened our online positioning.\u201d – says Ajit Joshi, MD & CEO, Infiniti Retail Ltd (the company that owns the Croma brand). Strategically, Croma online is positioned as an extension of the company\u2019s tag line:\u00a0 – \u201cWe help you buy<\/b>\u201d.\u00a0 Online store operations are geared around ensuring brand-consistency and operational ease \u2013 \u201cWe have strict turnaround times for all online orders \u2013 this creates low returns\u201d \u2013 says Ajit, \u201cAlthough customer expect discounted prices online \u2013 we offer the same prices in both channels.\u201d For brick and click retailers, this is important to ensure that channel cannibalization does not happen.<\/p>\n \u201cAnother area of focus for us is brand consistency.\u00a0 All marketing communication is branded to include both channels \u2013 and the company uses digital marketing extensively including a product blog and email campaigns.\u201d \u2013 says Ajit. The blog is targeted at the \u201ctechie\u201d customer (it\u2019s written in \u2018techie-ese\u2019) \u2013 consumer research showed that most customers researched product features online, understood and were comfortable with the associated jargon.<\/p>\n Croma has also pioneered the first true example of Omni-channel retailing in India.\u00a0 Called \u201cOOPS\u201d \u2013 O<\/b>rder O<\/b>nline and P<\/b>ickup from S<\/b>tore, it allows the customer to select a store based on pin code mapping after placing an online order. The customer can pick up her purchase at the chosen store – within 48 hours of placing the order.\u00a0 OOPS is targeted at the time-starved, urban affluent and is popular for high traction categories such as iPhones, iPads, smartphones, and Tablets.<\/p>\n The online model has not been without its challenges \u2013 some operational and some perceptual. Ajit says, \u201cWe\u2019ve dealt with teething problems ranging from website security, managing backend & logistics, ensuring secure financial transactions and settlement with the banks. In the online space, typically the Indian consumers expect lower prices. However at Croma, the prices are the same in both the models.\u201d<\/p>\n In tackling these challenges, Croma believes that the \u2018steady-state\u2019 for the online state is about Rs 20 cr per month \u2013 i.e. a 6x growth factor.<\/p>\n Impact Zone<\/b>:\u00a0 Croma\u2019s 25,000 daily site visitors spend between Rs 4,000 and Rs 5,000 per cash memo \u2013 and account for monthly sales of Rs 3 cr.\u00a0 Growth rates are high \u2013 100% y-o-y, partly explained by the low base. Utsav\u2019s ambitious flight<\/b><\/p>\n At the opposite end of the spectrum \u2013 Utsav Fashion has one physical store at Jaipur and most of its Rs 100 cr plus turnover is from online sales.<\/p>\n \u201cOur vision is to dominate the global market for Indian Ethnic Fashion \u2013 so, our physical retail presence is incidental. It acts as an aggregator for sourcing and for us to understand customer tastes, design preferences and service requirements from face to face interactions.\u00a0 Our goal is to be a Rs. 500 Crores company in the next 3 years.\u201d, says Pradeep Katiyal, CEO, Utsav Fashions<\/p>\n The company has been selling online for more than a decade. Online enables them to delink design from inventory.\u00a0 The website offers more than 50,000 designs online – an \u201cendless aisle\u201d concept.<\/p>\n \u201cThe entire look and feel of the website is based on a customer\u2019s buying thought process \u2013 design curiosity and queries.\u201d, says Pradeep.<\/p>\n \u201cUtsav Fashion works closely with the relevant tourism associations in Jaipur. This enables tourists from across the globe to shop from our offline store in Jaipur. They go back with the confidence that they can continue to get Ethnic merchandise in their own countries from our online operations\u201d , says Pradeep.<\/p>\n The final link in the chain is technology: Initially, innovation was about navigation on the website and grouping of products by occasion rather than garment category. In the last 12 months, Utsav has included video shopping, social shopping and mobile shopping features. \u201cUtsav \u2018s website is mobile-optimized and the company will soon launch mobile apps for Android and iPhones\u201d , says Pradeep. Other innovations include:<\/strong><\/p>\n Ferns & Petals (F&P) Online Journey <\/b><\/p>\n Ferns & Petals (F&P) \u2013 www.fnp.com<\/a> – <\/b>was set up in 1994 and with a vision of delivering flowers across India.\u00a0 The initial days were difficult, rentals were high and flowers perishable.\u00a0 A chance befriending of an employee of Taj Lands End, led to promoter Vikaas Gutgutia changing his business model. \u00a0A chance befriending with an executive from Taj Palace Hotel in Delhi, in 1997, changed the fledgling entrepreneur\u2019s business model. The company won the contract to supply flowers for a wedding at the hotel, creating what continues to be FNP\u2019s largest and most profitable segment. Excess flowers from the physical store started getting utilized\u2014a source of synergy and cost saving.\u00a0\u00a0 The company deepened its offering in the wedding \/ party market by offering not just flowers but end-to-end solutions including lighting, seating, and decoration.\u00a0 This was the segment which also helped build the F&P brand \u2013 high profile weddings are natural aggregators of the rich and the famous, especially Delhi\u2019s social elite.<\/p>\n To control the supply chain of flowers, the company set up a wholesale trading division; to regulate design, it learnt the craft, by importing skilled artisans from West Bengal; and to monitor scare, it set up systems and MIS. \u00a0It was one of the few organized players in the Rs 2500 flower market (source: Forbes, Aug 2013) to achieve scale and standardization. \u201cThere are other florists but F&P is the only one who has built scale in the business,\u201d says fashion designer Tarun Tahiliani who has partnered Gutgutia to set up designer flower stores, FNP Tahiliani.<\/p>\n In 2000, the company set up its online business \u2013to cater to the need of the overseas community\u2019s need to gift family and friends in India.\u00a0 The online business created pricing power and acts as an aggregator \u2013 driving orders to owned and franchised stores. \u00a0About 25% of franchised orders are via the online site \u2013 a source of synergy between brick and click. \u00a0\u201cFor example, if there is an order to be delivered in Bhilai, our ecommerce department places the order to the franchisee in Bhilai and they deliver the order. This way both the company and the franchisee work hand in hand to do the business.\u201d, says CEO Pawan Gadia.<\/p>\n Site navigation was reset (with significant investment in technology, after the first technology platform didn\u2019t succeed) so that availability drives range suggestions to customers. \u00a0\u00a0\u201cFor example, oriental lilies are not available in Patiala and so we do not showcase the online delivery option of oriental lilies in Patiala.\u201d\u00a0 , says Gadia.<\/p>\n The company has extended physical reach through the concept of \u2013express stores \u2013 using a franchisee model. It is also franchising its wedding event designs to tier II \/III markets. \u00a0\u201cWe also ensure \u2018Karigars\/ Malis\u2019 are centrally trained (through F&P\u2019s design school, to maintain the brand\u2019s standard. We have centralized warehouse for dispatching items which are uniformly used in the floral boutiques of Ferns N Petals.\u201d, says Gadia.<\/p>\n Scale has been pursued but not at the cost of profitability. Says Gadia, \u201cWe have mastered the art of turning outlets profitable\u201d. From the retail network today, 100 outlets are profitable, 20 are \u201con par\u201d and another 20 are \u201cstruggling\u201d, he says. Six months is the average time for an outlet to break even; if it doesn\u2019t do so within a year, it is shut down. The company is experimenting with variants of the Cash of Delivery\u00a0 (COD) model \u2013 customers can pay at the retail store, having ordered via the call center. Growth plans (in the \u2018brick\u2019 channel) include setting up stores in Kathmandu and Dubai and growth plans in the online space include making the site mobile enabled and launching apps to enable customers to buy off their smart phones.<\/p>\n Hidesign\u2019s e-commerce endeavors<\/b><\/p>\n Among the retailers surveyed by STORAI, Hidesign \u2018s online business is nascent \u2013 accounting for about 7% of its topline. The company has been present in the online space since 2009 but had adopted a \u2018scouting option\u2019 approach \u2013 i.e. maximum impact with minimum investment. The website was initially used to create brand awareness especially in the Tier 2 and Tier 3 cities, and morphed into an ecommerce portal about a year back.\u00a0 The online channel offers the standard COD, \u2018track your order\u2019 and free shipping functionalities. The company is planning a strategic tie up in 2014 with a specialist e-commerce company as a means to attract higher traffic.<\/p>\n \u201cWe redesigned the site ensure that designs and catalogues are updated on regular basis.\u00a0 We have increased the investments in online marketing and digital marketing channels.\u201d says Dipen Desai, Brand Manager, Hidesign.<\/p>\n The company has also aligned the online and offline channels: \u00a0\u00a0\u201cWe have introduced a new section on the website, which features new store launches and product placement in print, online and electronic media.\u201d, says Dipen, adding that \u201cOur in-house design team ensures that product placement pages are kept updated not just on our portal but also on the marketplaces where we are listed. The focus is on maintaining the premium positioning of the brand\u201d.<\/p>\n The biggest challenge the company has faced has been traffic: in an online context customers are habituated to \u2018deal based\u2019 shopping, which the brand\u2019s premium positioning precludes. Educating the online customer to focus first on design rather than price is a key focus area for this brand.\u00a0 At the same time, online allows the brand to showcase design and endless range options.<\/p>\n \u201cHidesign as a brand has a lot of depth in terms of styles. The website allows us to showcase our design and styling options. We also use the social media to draw traffic. We have invested in decreasing shipment timelines and are working on improving our response mechanisms. Reliable logistics and supply chain is very important to ensure the virtual store is successful. We are planning to invest in a new warehouse to manage online inventory as well.\u201d , says Dipen<\/p>\n Titan Online<\/b><\/p>\n Titan is a powerful offline brand. In the last 20 years the company also has a successful track record of building a portfolio of brands \u2013 e.g. Tanishq, Fastrack, Raaga, Sonata, Titan Eye Plus and most recently Titan Skin.\u00a0 The brands were built as independent businesses in the brick and mortar space.\u00a0 In the online world they are retailed off one platform. While this creates powerful range aggregation; titan.co.in retails 6000+\u00a0 products across categories like-jewellery, watches, accessories, eye wear, bags, sunglasses and fragrances \u2013 it also introduces challenges when it comes to supply chain and fulfillment.<\/p>\n \u201cTitan Company\u2019s ecommerce portal has been launched about 6 months back. It is early to comment on percentage of top line sales etc.\u00a0 We believe that digital will have significant role play for us and the retail industry in the future. Having said that, online retail is an evolving business in India, and we are in \u2018learning mode\u2019 \u201d explains Alokedeep Singh, Head, E Commerce Titan Company. While titan.co.in seems like a vertical portal \u2013 in reality it is a mini-marketplace. It was essential to create unique brand and shopper experiences .\u00a0 Alokedeep says, \u201cAs the e-store offers products, across our brands like Tanishq, Fastrack, Titan, Sonata, Titan Eye+ & more, the\u00a0 imagery, catalogue, banners, communication are in line with our Brand campaigns to maintain consistency in consumer\u2019s experience\u201d.<\/p>\n A key area of focus is ensuring synergy between \u2018brick\u2019 and \u2018click\u2019.\u00a0 \u201cBesides the brand experience, product range, pricing and offers have been kept consistent across both channels. The idea is to offer consumers a similar shopping experience on the channel of their choice\/liking.\u201d \u00a0Given the products sold are high involvement purchase, the online channel drives traffic to the physical store.<\/p>\n The online channel ses about 20% of traffic from mobiles \u2013 something that the company has taken note of.\u00a0 Future growth plan revolve around enhanced integration between both channels and moving to a omni-channel model.<\/p>\n Traditional brick and mortar stores have realized that the online space is a powerful channel to amplify reach, boost sales and build brands. STORAI speaks to four leading Brick & Mortar brands who are synergizing online and offline. Co-existence.\u00a0 It\u2019s… <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[13],"tags":[24,9],"_links":{"self":[{"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/posts\/1290"}],"collection":[{"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/comments?post=1290"}],"version-history":[{"count":9,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/posts\/1290\/revisions"}],"predecessor-version":[{"id":1299,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/posts\/1290\/revisions\/1299"}],"wp:attachment":[{"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/media?parent=1290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/categories?post=1290"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.rai.net.in\/wp-json\/wp\/v2\/tags?post=1290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n<\/a><\/p>\n<\/a>The model also ensures lower RTO (Return to Origin) rates.\u00a0 That\u2019s a key factor in channel profitability \u2013 unlike their e-tail counterparts, Croma has turned each store into a delivery centre for the online channel \u2013 this ensures that the two channels do not compete with each other.<\/p>\n
\n<\/a><\/p>\n<\/a>The e-store and the physical channel \u2018feed\u2019 off each other. The physical store provides reassurance to the NRI customer who visits India during the Christmas\/ New Year holiday, when Jaipur is a key tourist destination \u2013 and acts a conduit for vacation and occasion shopping.\u00a0 The online store provides access and world-wide shipping \u2013 ensure repeated purchases for the NRI \/ overseas customer who wants ethnic Indian wear.<\/p>\n
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<\/a>Through the 1990\u2019s the company continued to expand its store network.\u00a0 Key strategic constraints to be managed were the supply chain and ensuring standardization of delivered product – the bouquet delivered needed to look as fresh as its catalogue counterpart.<\/p>\n
\n<\/a><\/p>\n<\/a>Innovations including integrating the online channel into its loyalty program and selling gift cards, as well as increasing online presence by listing on market-places.<\/p>\n<\/a><\/p>\n\n\n
\n \n If you intend to Brick and Click then think….<\/h2>\n
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